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Repayment of interest and principal./ Where is my payment?
Repayment of interest and principal./ Where is my payment?

Article describing how WiseAlpha processes bond repayments and coupons and pays them to clients.

Written by George Flynn
Updated over a week ago

Cash Flows from bonds - a coupon payment (interest) or principal are paid to WiseAlpha.

These are then distributed to the holders of fractional bonds.

We aim to pay coupons within 3-5 days of the payment date.

Cash flows are subject to a paying agent and usually take between 2 and 3 days to "settle" or arrive in WiseAlpha's bank account from the date they are due.

Payments then have to be processed internally and distributed to the correct holders of the fractional bonds.

Cash payments may take longer to arrive in a customer's account as there can be delays on the paying agent's side or with WiseAlpha's custodian.

When a bond is distressed - that is the credit quality of the issuer of the underlying bond is such that a due payment is less certain, WiseAlpha will confirm with the Issuer or paying agent that the coupon has been paid correctly and is unlikely to be reversed.

This means that a coupon payment can take longer than 5 days to settle in a client's account.

When a bond has gone through a restructuring - that is the company issuing the debt has defaulted and then reduced its debt burden via a debt for equity swap and/or exchanging existing debt for new (smaller) debt, the payment process can take longer.

This is because restructured debt and equity are private (not listed).

Finally - cash payments may take longer than WiseAlpha's target time frame if the cash amount paid does not tally with the cash amount received.

In these cases WiseAlpha works with its custodian to reconcile any cash payments due and will pay them once satisfied they are correct.

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